COTABATO CITY, Philippines -- A regional terrorist network linked to al Qaeda has continued to train its militants in the southern Philippines, aided by local Muslim separatists, police and intelligence sources said. The militants, all Indonesians, are training at a camp established three years ago and now operating under the protection of rebels from the Moro Islamic Liberation Front, according to intelligence sources and a summary of the interrogation of Taufiq Rifqi, an Indonesian militant who was captured here last month.

Rifqi's testimony startled Philippine officials, who assumed they had deprived al Qaeda's Southeast Asian affiliate, Jemaah Islamiah, of its primary training ground three years ago when government soldiers overran its base. It also raises the stakes for peace talks aimed at ending the 31-year insurgency on the southern Philippine island of Mindanao. Diplomatic and security sources said a peace deal could close Mindanao as a vital center for the training and transit of foreign terrorists -- what a Western official in Manila called "a kind of Afghanistan east."

Within three weeks of Rifqi's arrest, police backed by military forces raided two safe houses that contained handwritten notes in Indonesian on making biological weapons, diagrams of amateur rockets, components for jury-rigging explosives and other documents and bomb-making materials.

The capture of Rifqi, who security officials said was Jemaah Islamiah's treasurer and logistics chief in the Philippines and arrived in Mindanao in 1998, was a wake-up call for the government, which had been "in denial about the existence of Jemaah Islamiah in Mindanao," a Philippine intelligence official said. "We are open in saying that the Jemaah Islamiah is a major threat," Defense Secretary Eduardo R. Ermita said in an interview. "We know the Philippines is a good target for their activities."

Since the Sept. 11, 2001, attacks on the United States, Asian and Western intelligence officials have unearthed extensive details about the operations of al Qaeda's Southeast Asian affiliate. Under interrogation, suspects have described a geographic division of labor in which Indonesia serves as the primary theater for attacks -- two nightclubs on the resort island of Bali were bombed a year ago and the JW Marriott Hotel in Jakarta, the capital, was hit in August. The Philippines was designated as the main training ground.

Until 1995, Southeast Asian terrorists were training in Muslim mujaheddin camps in Afghanistan, but Jemaah Islamiah's leaders decided to seek a location closer to home. Hundreds of militants, mainly Indonesians, slipped into the Philippines by fishing boat and other vessels through unregulated borders and trained at the main Moro Islamic Liberation Front camp. That site was destroyed by government troops during an offensive in mid-2000.

What officials did not know was that a new camp -- Jabal Qubah -- was set up almost immediately. Rifqi told interrogators that groups of 15 to 20 Indonesians have been attending 18-month training courses at the new site on the forested slopes of Mount Cararao in Maguindanao province, according to the interrogation summary and intelligence officials. There, in a few huts, Indonesian instructors have been teaching Indonesian recruits how to build bombs, fire weapons and read maps. Physical training and religious studies are part of the program.

The camp, several hours' walking distance from a Philippine rebel base, has operated under the protection of a rebel commander, identified by an intelligence official as Gordon Syaifullah. The training weapons were provided by the Moro Islamic Liberation Front forces, according to the interrogation. Jemaah Islamiah members in Indonesia financed the camp by transferring money through ATMs.

Including the instructors, about 30 militants -- all Indonesians – have been training at the site, Rifqi told investigators. "Our intelligence tells us because they know the military is on their trail, some may have left," said Ermita, the defense secretary. He added that about 20 Indonesian militants from several locations had fled the country in recent weeks, leaving about 30. Indonesian police agree that militants who trained in the Philippines have been returning to Indonesia.

Although security officials said they had learned of no specific attack planned for the Philippines, they were worried about the prospect of a bombing in the period from the current month of Ramadan through Christmas and New Year's. In December 2000, 22 people died in Manila in a series of blasts that police later attributed to the Moro Islamic Liberation Front and Jemaah Islamiah. Rifqi coordinated logistics for those attacks, a senior police official said.

Military commanders in Mindanao are planning a strike against the camp, security officials said. But senior Philippine officials, concerned that this could disrupt a four-month-old cease-fire with the rebels and undermine peace talks, have yet to approve the operation. Any offensive "should be surgical and not shotgun. There's something very important to protect here. That's the peace process," said a Philippine military official.

Rebel leaders deny that their forces are providing sanctuary to Jemaah Islamiah militants. "These foreign terrorists are like worms and nobody likes to be infected by worms. We have nothing to do with it," Ghazali Jaafar, vice chairman for political affairs for the Moro Islamic Liberation Front, said in an interview here. He added, "How can we control every inch of land in Mindanao?"

More to the point, Philippine and Western officials say, is that the Front's leadership cannot control all its local commanders, some of whom maintain ties with Indonesian militants. The Front's chairman, Al Haj Murad, is struggling to consolidate his authority after replacing Hashim Salamat, who died after a heart attack in July, Philippine and Western officials said.

In fact, Murad had ordered his followers to evict all Jemaah Islamiah militants from the training camp, a Philippine intelligence official said. But Murad lacks the organizational and religious standing of Salamat, who was an Islamic scholar trained in Egypt, officials said.

Ermita, the defense secretary, said of the report that the rebels had disassociated themselves from the terrorists: "We take that with a grain of salt. It seems the local commander doesn't believe in negotiations and doesn't necessarily follow orders from Haji Murad."

Security officials point to mixed signals being sent by the rebels. They said a commander in Lanao del Sur province in Mindanao gave sanctuary to the fugitive Jemaah Islamiah bomb-making expert Fathur Rahman Ghozi after he escaped from a Manila prison in July. But security officials said that rebel sources also provided information to the government about Ghozi's whereabouts before he was tracked down and shot dead by security forces in Mindanao last month.

A Philippine intelligence official also confirmed that Riduan Isamuddin, known as Hambali, Jemaah Islamiah's operations chief arrested in Thailand in August, told his U.S. interrogators that he had sent money to a Moro Islamic Liberation Front contact a month earlier for an attack in the Philippines. But the intelligence official warned that Hambali might have been lying.

Ermita said the Philippine government was preparing to provide rebel leaders with a list of criminals and Indonesian terrorists believed to be in areas under their control. Under an agreement last year, the Front is required to "neutralize, interdict and isolate" so-called lawless elements.

Negotiators from both sides are awaiting a final round of exploratory discussions in Malaysia that would set the date and agenda for formal peace talks. Philippine officials would like to secure an agreement before presidential elections in May. As an incentive, the U.S. government has promised development aid for Mindanao if the Moro Islamic Liberation Front, which has disavowed terrorism, also ends its armed insurgency.

About 300 U.S. troops are in the southern Philippines training local forces in counterterrorism. The United States proposed earlier this year to send 3,000 troops to the area to help eliminate the Abu Sayyaf, a smaller Muslim militant group designated by the State Department as a foreign terrorist organization. But that plan stalled after opponents said it violated a constitutional ban on foreign combat troops on Philippine soil.